So, you’ve started up your very own nonprofit organization: you’ve written your mission statement, you’ve rounded up a terrific board of directors, you’ve secured your 501(c)3 status, and you’re ready to start raising money. But wait! You’ve forgotten one thing: in order to raise money without breaking the law, you’ll need to register your charity in all of the states in which you intend to conduct business. On February 17th, Tony Martignetti, Esq., managing director of Martignetti Planned Giving Advisors, visited our New York library/learning center to enlighten charity leaders as to what they need to know in order to start fundraising without getting into legal trouble. The seminar, titled Demystifying State Charity Registration Laws, featured many useful pieces of advice, a few of which are mentioned below:
In addition to registering in the state where your charity is incorporated, remember to register your charity in every state in which you solicit. This includes solicitation from individuals, foundations, and corporations alike. If you accept donations through your web site, that counts as a passive solicitation. If you solicit through e-mail, regular mail, over the phone, or through events, that counts as active solicitation. Whether active or passive, you still need to register! If there are some states where you’re not registering, make sure that you do not accept any donations from those locations.
Every state’s requirements are a bit different, inconveniently enough, but luckily many have adopted the Unified Registration Statement(URS), a standardized form for registration that can be submitted to numerous states. Just keep in mind that even among the states that have adopted the URS, they often require you to send them some additional documents determined by those unique states. Also, registration fees vary widely as well. In some states, registration is free, in some there is a small fee (New York registration is $25), and in some there is a more substantial flat or tiered fee (Hawaii’s fees tend to be the priciest!). In most states, registering once a year is necessary, while in New York, filing once registers your nonprofit indefinitely. The National Association of State Charity Officials provides a listing of state charity registration agencies and other useful resources on its web site.
Before you register, check to see whether or not you’re exempt! If you’re a religious group, a hospital, an educational institution, or your revenue is relatively low, there’s a possibility that you could be exempt from registration. Once again, each state has different rules, so do your research.
These basic tips will help you get started – if you’d like to learn more about state charity registration, take a look at Tony Martignetti’s electronic guide, Charity Registration: State-by-State Guidelines for Compliance, available at www.charityregistrations.com.
See our FAQ, Can a nonprofit organization do fundraising activities in multiple states? and search the Foundation Center’s library catalog under the subject/descriptor "State laws regulating charitable solicitation" for more information and guidance.
Posted by Tracy Kaufman, Library Assistant
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